11.01.202210:45 Forex Analysis & Reviews: Analysis and trading tips for EUR/USD on January 11

Analysis of transactions in the EUR / USD pair

EUR / USD hit 1.1325 at a time when the MACD line was in the oversold area. That limited the downside potential of the pair, so traders could not take short positions as it may lead to losses. Some time after, the pair reached the level for the second time, but the market signal was to buy, so the quote rose by 20 pips. On its third time, the MACD line was below zero, which allowed sell positions. That provoked a 40-pip decrease in the pair.

Strong employment data in Italy and the eurozone, as well as investor confidence from Sentix, prompted an increase in EUR / USD. Also, dollar bulls had nothing to count on yesterday, so euro continued to rally even during the US session.

Most likely, the bullish momentum will continue as retail sales in Italy is expected to show gains. Statements from ECB members Joachim Nagel and Christine Lagarde could also lead to a surge in volatility.

In the afternoon, the US will publish data on small business optimism, but it is of little interest. Markets will focus instead on the statements of Fed members Loretta Mester and Esther George, as well as Fed Chairman Jerome Powell.

For long positions:

Buy euro when the quote reaches 1.1348 (green line on the chart) and take profit at the price of 1.1375. Growth may occur after the European Central Bank reveals its decision on monetary policy.

Before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.1335 ,, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1348 and 1.1375.

For short positions:

Sell euro when the quote reaches 1.1335 (red line on the chart) and take profit at the price of 1.1306. Demand will decrease if the ECB takes on a soft stance in monetary policy.

Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro could also be sold at 1.1348, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1335 and 1.1306.

What's on the chart:

The thin green line is the key level at which you can place long positions in the EUR/USD pair.

The thick green line is the target price, since the quote is unlikely to move above this level.

The thin red line is the level at which you can place short positions in the EUR/USD pair.

The thick red line is the target price, since the quote is unlikely to move below this level.

MACD line - when entering the market, it is important to be guided by the overbought and oversold zones.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.